TransUnion Forecasts That Credit Card Delinquencies Will Remain Low
The recent release of TransUnion’s annual forecast revealed two big bits of news: both credit card delinquency rates and mortgage delinquency rates are expected to remain low throughout 2012. Credit card delinquencies sunk to a 17-year low during the second quarter of this year.
According to predictions made by TransUnion, the third-largest credit bureau in the country, 2012 should see continued lows in terms of consumer credit card delinquency rates as well as a continued decline in mortgage loan delinquency rates.
Currently the percentage of borrowers 60 days or more past due on making their mortgage payments is 5.9%, but TransUnion expects that figure to drop to 5% by the end of 2012. Historically, mortgage delinquency rates are between 1.5 and 2%, but as a result of the recent recession they crept as high as 6.9% in the latter part of 2009. Since then, they have been declining slowly yet steadily but are still much higher than normal. It will take some time before the rates recede to their historical norm.
Reasons for the falling delinquency rates are, in part, because additional foreclosures have impacted the market, thus causing a reduction in the amount of outstanding delinquencies. Additionally, banks have focused their efforts on availing mortgages only to those borrowers with high credit ratings who are far less likely to default on their payments. The continuing stabilization of the housing market has had a positive effect upon the national mortgage delinquency rate, as well.
Credit card delinquency rates are at historic lows and should remain so in to the New Year. The amount of cardholders late on their payments by 90 days or more sits at 0.6%, a 17-year low.
“The card business is not very risky right now, and we don’t expect it to get very risky any time soon,” said TransUnion group vice president Steven Chaouki, according to Market Watch.
Data gathered by TransUnion revealed the average credit card balance to be $4,762, approximately $1000 less that it was in 2009. This is as a result of a combination of factors: consumers taking it upon themselves to reduce the amount they borrow via credit cards, bank charge offs and tougher lending standards. It is expected that in 2012, Wyoming, Alaska and North Dakota will be the three states in the nation with the lowest amount of credit card debt.
Latest Credit Card Issuers News
Wells Fargo & Company has recently announced the release of tap-to-pay contactless consumer credit and debit cards. Wells Fargo cardholders are already familiar with the advantages of digital wallets and are involved in paying for purchases and initiating ATM transactions by means of their mobile phones, while tap-to-pay cards are something new.
Dog-lovers can get checks or credit cards printed with pictures of adorable pups. If you’d rather be at the beach, you can carry a credit card picturing the waves and sand. And now sports fans can order a new credit card with the logo of their favorite teams and players.
Loyal JetBlue customers have another reason to use Chase credit cards: the banking giant and credit card issuer has announced that the JetBlue TrueBlue loyalty program is the newest Chase Ultimate Rewards partner, and cardholders will now be able to redeem their reward points for travel on the airline.
Good news for American Express Platinum cardholders who live or travel in the Denver area: American Express has just announced plans to add a Centurion lounge to the Denver International Airport (DIA). And it will be huge—over 14,000 square feet—making it the second-largest Centurion lounge location.
The Walt Disney Company and Chase Card Services recently announced that they will continue their longstanding relationship, extending their co-branded Disney Visa Card, Disney Premier Visa Card and Disney Visa Debit Card programs in a multi-year agreement.